View more on these topics


When Mahatma Gandhi pronounced: “We must become the change we want to see”, it is unlikely that the UK financial services industry was foremost in his thoughts.

However, as the last 10 years or so have led us to the midst of the greatest upheaval the industry has ever undergone, it seems that Gandhi may have had a point. Where do providers and IFAs want to be? Perhaps more importantly, is there a shared vision at all or is more fundamental change in the offing?

Whether one considers the current climate as exciting, challenging, depressing or disastrous, there is no doubt that opportunities will arise for those with the appropriate vision and delivery skills.

How this occurs and who ends up holding the balance of power is largely up to the participant although I believe strongly that IFAs have the opportunity to grab the initiative. IFAs who embrace new technology to improve their business processes, who take a longer-term view of their business by introducing more extensive (even if largely automated) client support and who adopt a more professional marketing strategy will thrive.

This is for the simple reason that there will always be a market for quality financial advice delivered in a professional manner. Even in the US, where investors are allegedly more sophisticated (financially at least), the demand for advice has never waned. The technology has merely been used to streamline matters and to cut out the unnecessary costs that were being absorbed by no-value processes.

On the technology front, while some life offices can justifiably claim to have made advances over recent years, there is little doubt that these have often been too little, too late and too inaccurate to IFAs. The delivery has seldom lived up to the hype and IFAs have been left frustrated.

This is unlikely to be the case with the kind of technology that we are seeing from fund supermarkets and portal services. IFAs now have the opportunity to offer their clients a genuine level of service on a strong and established technology platform.

Large parts of the IFA&#39s back-office admin cease to be so time-consuming and many client enquiries can be responded to with no intervention. While one cannot take accuracy for granted, the more transparent approach of supermarkets means that less time and resources need be tied up dealing with trivialities such as statement enquiries. Furthermore, IFAs can promote the supermarket within their own branding, strengthening client relationships.

IFAs who can deliver on these issues will continue to prove that distribution is king. It is clear from the short-term approach being followed by many life offices on stakeholder that this is also their view. The balance of power may be drifting even further in favour of IFAs and every adviser should ensure they are well placed to maximise the opportunities that will arise.

While this all sounds very optimistic, there is one fairly obvious area of concern. With it being this easy for existing IFAs to deliver such an attractive solution, it will be similarly easy for new firms. Although they may be handicapped by a lack of an active client base, this does not mean they cannot make inroads.

I close with some pearls from Albert Einstein. His view that “In the middle of difficulty lies opportunity” cannot be argued with. What is critical for IFAs is to identify the opportunities, develop an appropriate strategy and deliver it. If the present incumbents do not, then someone else will.

David Ferguson is a director of product design and marketing consultancy the abacus. You can chat about this subject at chat on Monday, February 12 at 12 noon.


Keep splits simple

The thought of integrating complex financial engineering in an Isa may turn off some advisers, particularly in the midst of a hectic Isa season when keeping it simple is likely to be the IFAs&#39 mantra. But despite the pitfalls of technical complexity, there are considerable benefits to investors by using split-capital investment trusts, ways of […]

Assets abandoned in the orphan age

The ripples caused by the High Court judgment in the Axa orphan assets&#39 case will be felt for some time. Estimates of the extent of orphan assets across the industry range from £20bn to £30bn and the decision is likely to be a precedent for future distribution across a range of companies. The Consumers&#39 Association […]

Richard Saunders

It would be difficult to question the new Autif director general&#39s credentials. Richard Saunders worked as a civil servant in the Treasury for 20 years, including a stint as former Chancellor Norman Lamont&#39s press secretary, before leaving the department in 1995. In 1986, he was responsible for the passage through Parliament of the Building Societies […]

CoFunds look to the Morning Star

It is understandable that the vast majority of attention on CP80 has been focused on the widening of the current tied environment to allow product providers to sell adopted products as well as their own. At the same time, however, even greater changes have been made in the area of direct-offer products. This will make […]

Finding value in UK equities

By Mark Martin, Investment Director & Head of UK Equities Register for a live update on 9 July at 14.30 with Mark Martin, who will be discussing Chancellor George Osborne’s ‘emergency’ summer budget, the UK equity landscape post May’s General Election and his outlook for the second half of 2015. Mark will also highlight the […]


News and expert analysis straight to your inbox

Sign up


    Leave a comment